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T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 9 - Company Accounts - Issue of Debentures

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Exercise/Page

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 9 - Company Accounts - Issue of Debentures Page/Excercise 9.54

Solution Ex. 1

 

In the books of Vishwas Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

50,000

------To 9% Debenture Application A/c

 

50,000

(Being application money received for 2,000 debentures at Rs.25 each)

 

 

9% Debenture Application A/c

Dr.

50,000

------To9% Debenture A/c

 

50,000

(Being debenture application money transferred to 9% Debentures A/c)

 

 

9% Debenture Allotment A/c

Dr.

50,000

------To 9% Debenture A/c

 

50,000

(Being debenture allotment money due on 2,000 Debentures at Rs.25 each)

 

 

Bank A/c

Dr.

50,000

 

------To 9% Debenture Allotment A/c

 

 

 

50,000

 

(Being debenture allotment money received)

 

 

 

 

 

 

 

 

 

 

 

9% Debenture First and Final Call A/c 

Dr.

 

1,00,000

 

 

------To9% Debenture A/c 

 

 

 

1,00,000

 

(Being debenture first and final call money due on 2,000 debentures at Rs.50 each)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,00,000

 

 

------To 9% Debenture First and Final Call A/c 

 

 

 

1,00,000

 

(Being debenture first and final call received)

 

 

 

 

 

 

 

Solution Ex. 2

 

 

In the books of A Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

48,000

------To 9% Debenture Application A/c

 

48,000

(Being application money received for 2,400 debentures at Rs.20 each)

 

 

9% Debenture Application A/c

Dr.

48,000

------To9% Debenture A/c

 

40,000

------To 9% Debenture Allotment A/c

 

4,000

------To Bank A/c

 

4,000

(Being debenture application money transferred to 9% debentures A/c for 2,000 debenture, adjusted to debenture allotment account for 200 debentures and money refunded for 200 debentures)

 

 

9% Debenture Allotment A/c

Dr.

40,000

------To 9% Debenture A/c

 

40,000

(Being debenture allotment money due on 2,000 debentures at Rs.20 each)

 

 

Bank A/c

Dr.

36,000

 

------To 9% Debenture Allotment A/c

 

 

 

36,000

 

(Being debenture allotment money received)

 

 

 

 

 

 

 

 

 

 

 

Debenture First Call A/c 

Dr.

 

60,000

 

 

------To 9% Debenture A/c 

 

 

 

60,000

 

(Being debenture first call money due on 2,000 9% debentures at Rs.30 each)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

------To Debenture First Call A/c 

 

 

 

60,000

 

(Being debenture first  call received)

 

 

 

 

 

 

 

 

 

 

 

Debenture Final Call A/c 

Dr.

 

60,000

 

 

------To 9% Debenture A/c 

 

 

 

60,000

 

(Being debenture Final call money due on 2,000 9% debentures at Rs.30 each) 

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

------To Debenture Final Call A/c 

 

 

 

60,000

 

(Being debenture first call received on 2,000 9% debenture at Rs.30 each)

 

 

 

 

 

 

 

 

 

 

 

 

Solution Ex. 3

Journal

Date

Particulars

 

L.F.

Dr.

Rs.

Cr.

Rs. 

 

Bank A/c (60,000 × 100)

Dr.

 

60,00,000

 

 

--------- To Debenture Application and Allotment A/c

 

 

 

60,00,000

 

(Being received application money on 60,000 Debenture)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

60,00,000

 

 

-------- To 10% Debenture A/c (40,000 × 100)

 

 

 

40,00,000

 

-------- To Bank A/c

 

 

 

20,00,000

 

(Being application money transferred to Debentures A/c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Solution Ex. 4

 

 

Books of Narain Laxmi Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

13,50,000

------To 9% Debenture Application and Allotment A/c

 

13,50,000

(Being application money received on 10,000 12% debentures of Rs.100 each at a premium of Rs.35)

 

 

Debenture Application and Allotment A/c

Dr.

13,50,000

------To12% Debenture A/c

 

7,50,000

------To Securities Premium Reserve A/c

 

2,62,500

------To Bank A/c

 

3,37,500

(Being 7,500; 12% debenture of Rs.100 each issued at a premium of Rs.35 and excess money refunded)

 

 

 

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 9 - Company Accounts - Issue of Debentures Page/Excercise 9.55

Solution Ex. 5

 

 

Books of Raj Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

50,000

------To 8% Debenture Application A/c

 

50,000

(Being application money received for 5,000 debentures at Rs.10 each)

 

 

8% Debenture Application A/c

Dr.

50,000

------To 8% Debenture A/c

 

50,000

(Being debenture application money transferred to 8% debentures A/c)

 

 

8% Debenture Allotment A/c

Dr.

1,00,000

------To 8% Debenture A/c

 

75,000

------To Securities Premium A/c

 

25,000

(Being debenture allotment money due on 5,000 8% debentures at Rs.20 including premium of Rs.5)

 

 

Bank A/c

Dr.

1,00,000

 

------To 8% Debenture Allotment A/c

 

 

 

1,00,000

 

(Being debenture allotment money received)

 

 

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c 

Dr.

 

3,75,000

 

 

------To 8% Debenture A/c 

 

 

 

3,75,000

 

(Being debenture first and final call money due on 5,000 debentures at Rs.75 each)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,75,000

 

 

------To 8% Debenture First and Final Call A/c 

 

 

 

3,75,000

 

(Being debenture first and final call received)

 

 

 

 

 

 

Solution Ex.6

Face value   Rs.100

Premium 10%= (100 × 10%) Rs.10

  Issue Price = Rs.110

Payable as:

On Application (25%) (10+15) 

Rs.25 including premium of Rs.10 

On Allotment (85%)

Rs.85 per

 

 

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Debenture Application A/c

Dr.

2,50,000

------To Debenture A/c

 

1,50,000

------To Securities Premium A/c

 

1,00,000

(Being debenture application money received for 10,000 debentures at Rs.25 including premium of Rs.10 each transferred to debenture account)

 

 

Debenture Allotment A/c

Dr.

8,50,000

------To Debenture A/c

 

8,50,000

(Being debenture allotment due on 10,000 Debentures at Rs.85 each)

 

 

Cash Book

Dr.

 

 

 

 

Cr.

Date

Particulars

Rs. 

Date

Particulars

Rs. 

 

To Debenture Application A/c

2,50,000

 

By Balance c/d

11,00,000

 

To Debenture Allotment A/c

8,50,000

 

 

 

 

 

11,00,000

 

 

11,00,000

 

 

Solution Ex. 7

 

 

Journal 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

14,00,000

------To Debenture Application A/c

 

14,00,000

(Being application money received for 7,000 debentures Rs.200 each)

 

 

Debenture Application A/c

Dr.

14,00,000

------To10% Debenture A/c

 

14,00,000

(Being transferred of application money to Debentures A/c)

 

 

Debenture Allotment A/c

Dr.

24,50,000

Loss on issue of Debentures A/c

Dr.

3,50,000

------To10% Debenture A/c

 

21,00,000

------To Securities Premium Reserve A/c

 

3,50,000

------To premium on Redemption of Debentures A/c  

 

3,50,000

(Being allotment due on 7,000 Debentures Rs.300 each at a premium of Rs.50 per debentures and redeemable at premium of 10%)

 

 

Bank A/c

Dr.

24,50,000

 

------To Debenture Allotment A/c

 

 

 

24,50,000

 

(Being allotment money received)

 

 

 

 

 

 

Solution Ex. 8

 

 

Books of Vijay Laxmi Limited

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

22,95,000

------To Debenture Application and Allotment A/c

 

22,95,000

(Being application money received on 13,500 12% debenture)

 

 

Debenture Application and Allotment A/c

Dr.

22,95,000

------To12% Debenture A/c

 

10,00,000

------To Securities Premium Reserve A/c 

 

7,00,000

------To Bank A/c 

 

5,95,000

(Being 10,000; 12% debenture issued at a premium of Rs.70 and excess money refunded)

 

 

 

Solution Ex. 9

Journal

Date

Particulars

 

L.F.

Dr.

Rs.

Cr.

Rs. 

 

Bank A/c

Dr.

 

2,00,000

 

 

-------- To debenture Application A/c

 

 

 

2,00,000

 

(Being application money received)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

2,00,000

 

 

------- To 9% Debenture A/c

 

 

 

1,50,000

 

------- To Security Premium Reserve A/c

 

 

 

50,000

 

(Being application money adjusted)

 

 

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c

Dr.

 

2,25,000

 

 

-------- To 9% Debenture A/c

 

 

 

1,50,000

 

-------- To Security Premium Reserve A/c

 

 

 

75,000

 

(Being allotment money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,25,000

 

 

-------- To Debenture Allotment A/c

 

 

 

2,25,000

 

(Being allotment money received)

 

 

 

 

 

 

 

 

 

 

 

Debenture First and Final call A/c

Dr.

 

2,75,000

 

 

-------- To 9% Debenture A/c

 

 

 

2,00,000

 

-------- To Security Premium Reserve A/c

 

 

 

75,000

 

(Being first call money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,75,000

 

 

--------- To Debenture Final and Final call A/c

 

 

 

2,75,000

 

(First Call money Received)

 

 

 

 

 

 

 

 

 

 

 

Solution Ex. 10

 

Face value   Rs.100

Discount 5% =(Rs.100 × 5%)Rs.5

  Issue Price = Rs.95

 

Payable as:

On Application (25%)  

Rs.25 per

On Allotment (85%) (25 - 5 )per

Rs.20

On First and Final Call (50%)

Rs.50 per  

 

 

 

 

Journal 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

3,00,000

------To 8% Debenture Application A/c

 

3,00,000

(Being application money received for 12,000 8% debentures at Rs.25 each)

 

 

8% Debenture Application A/c

Dr.

3,00,000

------To 8% Debenture A/c

 

3,00,000

(Being debenture application money transferred to 8% debentures A/c)

 

 

8% Debenture Allotment A/c

Dr.

2,40,000

Discounted on Issue of Debentures A/c

Dr.

60,000

------To 8% Debenture A/c

 

3,00,000

(Being allotment money due on 12,000 8%  debentures at Rs.20 each at discount of Rs.5)

 

 

Bank A/c

Dr.

2,40,000

 

------To 8% Debenture Allotment A/c

 

 

 

2,40,000

 

(Being allotment money received)

 

 

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c 

Dr.

 

6,00,000

 

 

------To8% Debenture A/c 

 

 

 

6,00,000

 

(Being first and final call money due on 12,000 8%  debentures at Rs.50 each)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,00,000

 

 

------To 8% Debenture First and Final Call A/c 

 

 

 

6,00,000

 

(Being first and final call received)

 

 

 

 

 

 

Solution Ex.11

 

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Bank A/c

Dr.

25,00,000

------To Debenture Application A/c

 

25,00,000

(Being application money received for 5,000 debentures Rs.500 each )

 

 

 Debenture Application A/c

Dr.

25,00,000

------To10% Debenture A/c

 

25,00,000

(Being transferred application money to debentures A/c)

 

 

Debenture Allotment A/c

Dr.

20,00,000

Discount on issue of Debentures A/c

Dr.

5,00,000

Loss on issue of Debentures A/c

Dr.

2,50,000

------To 10% Debenture A/c

 

25,00,000

------To Premium on Redemption of Debentures A/c  

 

2,50,000

(Being allotment due on 5,000 debentures Rs.500 each at a discounted of Rs.100 per debentures and redeemable at premium of 5%)

 

 

Bank A/c

Dr.

20,00,000

 

------To Debenture Allotment A/c

 

 

 

20,00,000

 

(Being allotment money received)

 

 

 

 

 

 

 

Solution Ex. 12

Journal

Date

Particulars

 

L.F.

Dr.

Rs.

Cr.

Rs. 

 

 

 

 

 

 

 

Incorporation Cost A/c

Dr.

 

2,00,000

 

 

-------- To 6% Debentures A/c

 

 

 

2,00,000

 

(Being 2000 debenture Rs.100 each issued to promoters)

 

 

 

 

 

 

 

 

 

 

 

Solution Ex. 13

 

 

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Building A/c

Dr.

9,00,000

------To Vendor A/c

 

9,00,000

(Being building purchased)

 

 

Vendor A/c

Dr.

9,00,000

Discount on Issue of Debentures A/c

Dr.

1,00,000

------To 10% Debentures A/c

 

10,00,000

(Being issued 10,000, 10% debentures at 10% discount)

 

 

Working Note: 

 

Solution Ex. 14

 

 

In the books of Wye Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Sundry Assets A/c

Dr.

2,00,000

------To vendor A/c

 

2,00,000

(Being business purchased)

 

 

Vendor A/c

Dr.

65,000

------To Bank A/c

 

65,000

(Being amount paid to vendor in cash)

 

 

Vendor A/c

Dr.

1,35,000

Discount on Issue of Debentures A/c

Dr.

15,000

------To 9% Debenture A/c

 

1,50,000

(Being issued 1,500 debentures at 10% discount)

 

 

Working Note: 

 

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 9 - Company Accounts - Issue of Debentures Page/Excercise 9.56

Solution Ex. 16

(i)

 

 

In the books of Reliance Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Machinery A/c

Dr.

1,35,000

------To Vendor A/c

 

1,35,000

(Being machinery purchased)

 

 

Vendor A/c

Dr.

1,35,000

------To 9% Debenture A/c

 

1,35,000

(Being issued 1,350 debentures at par)

 

 

Working Note: 

 

 

 (ii)

 

In the books of Reliance Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Machinery A/c

Dr.

1,35,000

------To Vendor A/c

 

1,35,000

(Being machinery purchased)

 

 

Vendor A/c

Dr.

1,35,000

Discount on Issue of Debentures A/c

Dr.

15,000

------To 9% Debenture A/c

 

1,50,000

(Being issued 1,500 debentures at 10% discount)

 

 

Working Note: 

 

 

 

Solution Ex. 17

 

 

Books of Deepak Ltd.

Journal Entries 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Furniture A/c

Dr.

2,20,000

------To Furniture Mart A/c

 

2,20,000

(Being furniture purchased from furniture mart )

 

 

Furniture Mart A/c

Dr.

1,10,000

------To Bills Payable A/c

 

1,10,000

(Being bill accepted from furniture mart against 50% payment)

 

 

Furniture Mart A/c

Dr.

1,10,000

------To 9% Debenture A/c

 

1,00,000

------To Securities Premium A/c

 

10,000

(Being issued 1,000 9% debentures of Rs.100 each at a premium of 10% furniture mart)

 

 

Working Note: 

 

Solution Ex. 18

Journal

Sr. No.

Particulars

 

L.F.

Dr.

Rs.

Cr.

Rs. 

 

Assets A/c

Dr.

 

6,60,000

 

 

Goodwill A/c (Balancing figure)

Dr.

 

20,000

 

 

-------- To Liablities A/c

 

 

 

80,000

 

-------- To Y Ltd

 

 

 

6,00,000

 

(Being purchase of business of Y Ltd)

 

 

 

 

 

 

 

 

 

 

 

Y Ltd

Dr.

 

60,000

 

 

-------- To Cash A/c

 

 

 

60,000

 

(Being payment made in cash)

 

 

 

 

 

 

 

 

 

 

(a)

Y Ltd

Dr.

 

5,40,000

 

 

---------- To 12 % Debenture A/c

 

 

 

5,40,000

 

(Being purchase consideration discharged by issue of 12% Debentures)

 

 

 

 

 

 

 

 

 

 

(b)

Y Ltd

Dr.

 

5,40,000

 

 

-------- To 12% Debentures A/c

 

 

 

4,50,000

 

-------- To Security Premium Reserve A/c

 

 

 

90,000

 

(Being purchase consideration discharged by issue of 12 % Debentures)

 

 

 

 

 

 

 

 

 

 

(c)

Y Ltd

Dr.

 

5,40,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

60,000

 

 

-------- To 12% Debenture A/c

 

 

 

6,00,000

 

(Being purchase consideration discharged by issue of 12% Debentures)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working Notes:

  

Solution Ex. 19

Journal

Sr. No.

Particulars

 

L.F.

Dr.

Rs.

Cr.

Rs. 

 

Assets A/c

Dr.

 

6,60,000

 

 

Goodwill A/c (Balancing Figure)

Dr.

 

20,000

80,000

 

-------- Ti Liablities A/c

 

 

 

6,00,000

 

-------- To Y Ltd

 

 

 

 

 

(Being purchase of business took over)

 

 

 

 

 

 

 

 

 

 

(a)

Y Ltd

Dr.

 

6,00,000

 

 

-------- To Cash A/c

 

 

 

60,000

 

-------- To 12 % Debenture A/c

 

 

 

5,40,000